Motorola's new Citrus for smartphone newcomers

It's not yellow or orange, but a simple black. Schaumburg-based Motorola Inc.'s new eco-friendly Citrus debuts today and targets smartphone virgins.

Motorola aims to use the basic handset to introduce smartphones to a whole new group of consumers, even after it has successfully provided the most high-powered, fully loaded Android smartphones on the market.

Is it a step backward? Hardly.

“Motorola is committed to offering smartphones for every lifestyle, so we aim to give consumers choices that meet all of their needs, whether they're at work or at play,” a Motorola spokeswoman said.

Some analysts see a lot of benefits to appealing to all consumers here and abroad, and ensuring a smartphone in every hand.

“There is clearly a market for entry-level smartphones, and Motorola seems intent on addressing the entire market,” said Joseph Beaulieu, analyst with Chicago-based Morningstar Inc. “Still, I think the bottom-to-mid market is especially competitive, with handset makers like HTC and Samsung competing aggressively there. Motorola has to address that part of the market as well in order to continue to drive volumes, but in my mind, the place where they've really differentiated themselves is at the high end of the market.”

Citrus is now available in Verizon Wireless Communications stores and online at www.verizonwireless.com for $49.99, after a $100 mail-in rebate with a new two-year contract.

The smartphone offers a PC-like Web browsing experience, and its on-screen Swype keyboard allow for quick messaging. The phone's housing is made from 25 percent post-consumer recycled plastic. And it comes pre-loaded with Bing Search and Bing Maps, a different move than other Androids.

“Verizon is clearly trying to put its stamp on the Android phones on its network. My thesis has been that the reason why the carriers are pushing Android so hard is that Android handsets are not specific to any handset-maker, thus giving the carriers a bigger opportunity to be the center of the customer relationship,” said Beaulieu.

He said it's reminiscent of the early-to-mid 1990s when all of the PC makers, including AST and Packard-Bell, were putting their own suite of apps on their PCs, and even putting a “shell” around Windows in order to differentiate themselves.

Analysts who have seen or used the Citrus say it seems like a decent phone. But low-end smartphones have not done well in the United States for several reasons, said Edward Snyder, managing director and analyst with St. Louis-based Charter Equity Research.

“First, they're usually underpowered, which makes many of the applications drag,” said Snyder. “Second, and most important, the cost of the data plan required by the carriers and the two-year contract amount make the total cost of a smart phone so much higher than the $100 to $200 you save by buying a low-end smartphone that most people get the highest powered smartphone they can find. What's the point of saving $150 for a low-end smartphone when service contract costs you $1,300?”

LG's low-end smartphones released in May to Verizon did poorly. Motorola may do better but it's an uphill fight in the United States, Snyder said.

For more on Citrus, see: www.motorola.com/Consumers/US-EN/Consumer-Product-and-Services/Mobile-Phones/MOTOROLA-CITRUS-US-EN

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